Statistics chief says he is not being pressured over financial reporting

The Finance Minister and the National Statistics Office director general Michael Pace Ross refused to comment over the minister's request to investigate why the NSO published incorrect data on the country's Gross Domestic Product.

Yesterday, finance minister Edward Scicluna asked the chairman of the Malta Statistics Authority (MSA) - the independent regulator for official national statistics - to investigate what led to the National Statistics Office to miscalculate the country's GDP.

The request followed Scicluna's outburst during Monday's MCESD meeting in which he accused the NSO of issuing misleading information on economic data.

In uncustomary manner, Scicluna showed his irritation at what he described as "misinformation on economic data" and blamed this on the way NSO releases information to the press.

"Today, one particular newspaper reported that inflation had increased, however in reality, inflation is at its lowest rate in a very long time. In August, inflation stood at 0.6%, however for some reason the NSO highlights the moving average instead of the latest rate of inflation. It's like going to a doctor to check your blood pressure and instead of being told what your blood pressure is at the moment, you are given an average of the past year," Scicluna said.  

Contacted by MaltaToday, the NSO director general Michael Pace Ross, who has been occupying the post for over five years, said that "there is no pressure whatsoever in the way data is calculated and published".

Asked whether he will stay beyond his current contract, Pace Ross said that his contract expires in 2014, but refused to delve into his future at the helm of NSO. 

On the error which led to the finance minister to ask for an official investigation, Pace Ross said that the NSO statement clarifying the error was very clear. 

"NSO detected an error, which it regrets, and, in line with the European Statistics Code of Practice, took steps to correct it immediately. NSO will cooperate fully with any investigation by the Malta Statistics Authority. Pending the outcome of this investigation, the NSO is not in a position to comment further," he said.

The finance ministry refused to answer questions on whether Pace Ross enjoyed the government's confidence and whether it intended to extend his contract.

A spokesperson told MaltaToday: "The ministry does not feel it is prudent to comment before an investigation can be conducted by the regulator concerned, the Malta Statistics Authority, which is being requested by the ministry to prepare a detailed report with relevant recommendations."

Yesterday morning, the ministry noted a statement issued by the National Statistics Office which said that the post production validation and checking process identified a compilation error in the component 'Taxes on Production and Imports' originally published on 6 September 2013.

The finance ministry added that according to the statement, this had a significant effect on the Gross Domestic Product figure for 2013 Quarter 2, which in September 2013 was mistakenly listed as 1.7%, but was in fact recalculated to 3.6%.

It added that minister asked the MSA chairman Albert Leone Ganado to investigate "what may have led to the error, together with any other related issues. The Minister will be requesting a detailed report including recommendation for the further strengthening of the institution".

Leone Ganado was appointed at the helm of the authority in July by Scicluna.

"The ministry has also received assurances that the error occurred within the statistical agency and was not contained in any upstream tax data provided by the finance ministry," the statement said.

The ministry also pointed out that the draft Budget for 2014 is based on an economic forecast for 2014, which in turn is estimated over a long-term time-series, and is therefore not expected to be affected by one particular quarter.

"In line with the European Statistics Code of Practice, which requires that errors discovered in published statistics are corrected at the earliest possible date and publicised, NSO recalculated provisional GDP estimates for the second quarter as published last month."

In reaction, the Nationalist Party expressed its concern over Scicluna's criticism and former finance minister Tonio Fenech accused Scicluna of political interference. 

"Scicluna expects the NSO to only publish the data which suits him instead of reflecting the country's financial and economic realities. In particular, he admitted that he does not want the NSO to show what the reality is in terms of the unemployment rate, which has continued to increase month after month, and in relation to infaltion, which has also continued to increase in recent months ," Fenech said.  He added that this was not the first time the Labour government attacked the independence of NSO and underlined Scicluna's visit at the NSO premises, when he had "questioned the credibility of the NSO when criticising the way it collects statistics on the country's GDP".

The Opposition MP added that such attacks on the credibility of the NSO are "extremely dangerous" because they damage the country's credibility.

"The independence of statistics published by the NSO, although falling under the government's responsibility, is crucial in maintaining the respect of European and international institutions, credit rating agencies and investors looking at Malta as a reliable country to conduct their business in," Fenech said.